tv Squawk on the Street CNBC April 29, 2014 9:00am-12:01pm EDT
it is the buzz of the morning. the cnbc first 25 list being released this morning. we've been talking and debating it all morning. >> lot of chatter on twitter and all over about it. >> this was your idea, wasn't it? >> no, no no. it was not my idea. it was actually the idea of our senior vice president nick and others here to come up with a 25 -- yeah, right. >> we'll be watching the rest of it. time for "squawk on the street." ♪ heaven help me ♪ when you call my name it's like a little prayer ♪ >> good morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. what a show we have for you this morning. the ceos of starbucks, of hewlett-packard, of comcast and we'll detail more of the cnbc 25, the most influential business leaders of the past quarter century. futures in the meantime are higher after the wild ride
yesterday. a 27-point range in the s&p. earnings from coach, merck and panera and twitter tonight. ten-year yields around 2.72. the fed begins a two-day meeting today and europe is up across the board led by the dax in germany. our road map goes like this. a day we here at cnbc has been counting down to. our official first 25 list of rebels, icons and leaders unveiled this morning. we'll bring you the ranksings. >> merck shares are higher in the premarket after it beat the street despite some generics cutting into revenue and reaffirmed full-year guidance. >> coach shares lower in the premarket. women's accessories taking a lit despite earnings coming in ahead of consensus. first up, the list is out, this morning cnbc has unveiled its first 25 list as we celebrate 25 years on the year. the people who have had the biggest impact on business and finance over the last quarter century. the top 5 is led by steve jobs, followed by bill gates, ben
bernanke, alan greenspan, the google guys, written, page and schmidt and jeff bezos. on "squawk on the street" we'll have interviews with two of the first 25, starbucks ceo and chairman howard schultz going to sit down with jim and david has hewlett-packard's ceo meg whitman later on in the show. it does sort of bring to mind where american business and the economy was in 1989 when we thought japan was going to basically own the world. now it's a much different picture because of the people we're celebrating today. >> i think that's true. when you go back to 1989, the tokyo market was really where the action was. you had to get up at 2:00, 3:00 in the morning to trade in the most important market in the world. during that period intel was not the largest because of japan, but i think that the u.s. reclaimed the leadership. however, the inferiority complex i hear from business people is rather extraordinary. it's almost as if china is the
leader. the torch somehow got passed from tokyo to china, left out u.s. the list does not say that, though. the list verifies what i think the common person thinks in this country which is that if you work really hard even if you're from humble beginnings that would be jack welch this morning or howard schultz later this morning you can still make great. it's a shame i feel what jack welch said today was stunning, which is that people just feel like it's -- they hate business because business has been -- has become a whipping boy in this country. >> that's unfortunate. listen the vibrancy of and creativity of the people you're looking at what they were able to do for the u.s. economy since 1989 is incredibly significant. i do think a lot of the talk that is negative in tone ends up back in washington. we talk about it so many times and you throw the conversation off. we don't have immigration policy. one day we'll figure it out. don't have corporate tax reform
we have all these corporations looking to get out of the u.s. jurisdiction which will lower revenues but at some point maybe we'll figure that out. we don't have an energy policy. it would be helpful. we'll figure it out. a lot of it goes back to that now, the negativity and the fact that we do not have a hope in some way that we're going to deal with those large problems that typically government has, at least and i know many of our viewers and i'm sure here, government has sometimes led on and succeeded at. >> i think that maybe one of the themes of the 25 years, judging on what you said, this is right, the government's become the most intrusive force in business. you know, you can go back to when cnbc started. and the government was a veteran of business. maybe because the previous administration, bush administration was too la say fair, you get what you pay for, ceos maybe they had too good a time. but it is odd to listen and realize well, there's been great triumph by the execs, but was
the triumph done in the united states? >> i think it was. >> you think so? >> any doubt in your mind we are at the forefront of innovation, entrepreneurship, of digital technology, now of energy. >> no -- >> i think we forget -- i think the ceos want a challenge to lean into and it has -- the fact that it is the government this time is nothing new. >> that's a good point. i tell you, i'm thinking more about where howard schultz''s expansion is because i'm going to be interviewing him soon. the technology mantle, japan was regarded as a country that had taken world war ii technology, that we had given them, post-war, you can go back to this 25-year period, and really improved on it. its was as if truckdrug drunk - drucker, lots of management had become ossified. the period where you felt the raiders shook everything up. it is true we have gone from a country where you wanted to go to an ivy league school in the northeast to be able to triumph
at a major investment bank, to wanting to go to harvey mudd and pomona and cal tech and stanford. >> or drop out of college completely. >> one of the most -- >> zuckerberg. >> when you look at the 25 -- no one finished harvard. obviously went wrong. i finished harvard. clearly that was one of the greatest mistakes of my career. >> carl icahn on the list. >> princeton. >> he did finish princeton. >> up from nothing. >> conceivably he would claim the mantle in terms of helping to shape corporate boards, although he says they're as bad as they've ever been. we can have a debate that went on -- every one of the issues we could spend a show on. >> that's what's good about the 25. a source of discussion. we could easily just go through the names. i listen, i'm look for these common themes. up from nothing. lots of people went to great schools that are paid for by the state. in other words we've seen good government intervention and bad.
i have to temper my negativity because i felt what jack had to say resonated so clearly with us. this list is filled with people who have triumphed over whatever the barrier is. >> i'm not sure that jack's world view matches jeff bezos' world view. >> that's a very good point. >> very different areas that we're talking about. >> you're right. >> very different all from each other too. zuckerberg and bezos don't have the same world view. >> one-hour special on the cnbc 25. provoking a lot of discussions today. tyler mathisen heads that up tonight at 7:00 p.m. eastern on cnbc. we have earnings this morning. merck reported first quarter numbers of 88 cents. that did beat expectations. revenue slightly short of consensus heard by generic competition for singular allergy. dow component reaffirming earnings guidance. genuvia came in good too. r and d down 17. >> isn't it funny you have the incredible dichotomy between allergan which spends more on
research and development but perhaps going to be bought by valeant one of the things they'll do, i believe. >> they're going to get rid of 80% of the r and d budget or more if valeant is successful in its attempt to acquire allergan. >> merck has -- merck is kind of the newer big pharma thatter what we're -- that what we're hearing in big pharma, you have to buy overseas to get the money and lower your tax rate. that's the pfizer solution. the merck solution, is to fire fire fire. the allergan solution was to spend spend spend. the allergan solution make that company no longer independent. the merck solution is liked by the market. the pfizer solution is being loved by the market. loved. >> i'm trying to think that through. you don't spend or succeed but you do succeed and then do spend and do succeed but you get bought and then you invert yourself because everybody's got to invert themselves. >> i'm just -- >> as we've been talking about. >> you were head of everyone on this. i congratulate you.
you told me this was going to be the wave. what i'm saying is that what this market has gone from is liking research companies or having them bought in the case of -- >> to liking eps. >> that's right. >> absolutely right. >> not better. >> just wanting deals and bottom line eps and not about r and d and not about how you -- about growth necessarily just about eps. >> mcdonald's. >> the echo of the letter about buybacks and dividends. >> and what's happened remember we were supposed to no longer like the companies that just did it. bottom line only, we liked top line. top line growth has been the destroyer, portfolios in the last six weeks than i can recall any other. the companies that went 60% growth, it means nothing. i had home away on last night, brian sharp developed this model f if you have a vacation house or property, i've watched that stock be crushed. it is a profitable company with 30% growth and what people want
is b and g foods which is a company that had no growth, but yields 4% and is finding ways to acquire deadbeat companies and bring them back to life. this market has done a total inversion because of tax inversions. >> it's a great point you're making. by the way, amazon yesterday, beat up again, down 25% this year. 23% revenue growth. continuing to spend money and this focus as you say on the bottom line, perhaps for first time in a while there. bad day yesterday by the way. again not for a lot of the hedge funds. it was an ugly day. >> nasdaq up 0.3%. s&p terrific. >> a lot of names getting crushed again. >> what's interesting you're seeing a lot of competition. last night at one point home away talked about a product that could compete with yelp. rubicon. just became public a month ago. stock was the biggest percentage decliner. how about amazon going up against really what used to be partners. how about partners going up against partners. how about old line coming back, oracle ringing the bell,
becoming the cloud company. how about ibm up 3 yesterday because it is more cloud and then how about gogo this morning. you'll see that stock down badly. why? because at&t has decided to go up against them and there's a materiality clause in the gogo contract. if someone comes up with a better mouse track they will lose the contract with the airlines. at&t. >> at&t in the air, go, go, go, going. >> competition everywhere which is one of the reasons why the multiples have come down and meanwhile big pharma is carved up. you don't have a lot of competition. maybe the mosts competition you'll see is help c, old line pharma coming in against market darling gilead. >> yep. >> when we come back, nobel laureate robert shiller on the case-shiller numbers. his take on the markets as well and later this hour, wings, beer, sports and earnings beat for buffalo wild wings. we'll talk to sally smith, the ceo, one more look at futures as we try to get some back after
in the 10 and 20 city composites remained unchanged month over month. robert shiller the co-founder of the case-shiller index, noble lawyer et and professor at yale university. good to have you back. good morning. >> good morning. >> part of the release talks about the disparity between the prices, the home prices, and the weak numbers we've seen out of new and existing over the past couple of weeks. what do you make of that? >> well first of all, our numbers are for february. but it's been more than a couple weeks that we've been getting weak numbers in various dimensions like permits, the nahb, housing market index starts, existing home sales, so yeah, the market would seem to be weakening. even months ago. but our data are still holding in there on a seasonally adjusted basis they look as -- pretty strong. >> do you expect the numbers to start a downtrend once we get into march numbers? >> i think it might. although years ago, i used to
publish regular forecasts and one thing i learned then, is that there's a lot of momentum in the housing market and so the most important number is the housing price number. now it is flat now. it's not going up. but it might be just repeating what it did last year. last year at this time the housing price index was flat again. but then it took another upsurge. so i really am uncertain now. i think there's a chance that we still are in a strong market, despite this data, but the data do worry me, the other data that starts in permits data do worry me? >> in the past prices lag sales but there's a lot of discussion maybe sales are lagging prices and why is that, due maybe to the institutional investor dynam dynamic. what's your thought? >> this institutional investor dynamic is a new era. as institutional investors start to play in the single family
market that changes it fundamentally. this market as i wrote chip case and i wrote 20 years ago, is horribly inefficient. it's --s unbelievably or has been, but once the professionals start coming in, i don't know if that's going to still be true. and as markets develop, you know, they might get looking more like a random some day. >> wow. random wonk. we have seen over and over again that the big buyer in the market is private equity and a lot of times they want to convert these into rentals. how does that secular change impact your numbers? >> well, i think that it's a very important -- these people are not just speculators, they're fulfilling a very important function. namely, there seems to be a high demand for rentals now. so it's perfectly natural for these people to go into the business of converting. but then, the way i think of it, this may be a new equilibrium
with more people wanting to rent. that equilibrium doesn't bode really well for existing home prices. because existing single-family homes are not ideally suited to be functioning as rentals. and so it seems to me that might bode for an equilibrium price. >> i want you to put on your nobel laureate price and talk about the markets which we've been talking. revenue growth out, high multiple stocks suddenly out, everybody focused on the lower, and i'm using quotations, multiples. is that a positive in your opinion, a healthy sign for the market? >> well, i think the market is a bit unhealthy already, so things that boost stock prices right now are not in my view so terribly healthy. yeah. >> why? >> why is that? >> i think the market is kind of highly priced. it looks a little bubbly in some sectors but it's not horribly
high. it's sort of in real terms it's still there, still in the normal range. high normal range. >> high normal. so what gives you pause then? i'm sorry. i'm not understanding. what are you concerned about? >> well, yeah, i'm concerned, there's always a concern about bubble thinking, starting to develop. we've seen it in the tech sector. and it isn't strong. you can -- i can't forecast the market very well. i can just say it look highs, there's some bubbly sentiment that make mess mistrustful of the market. on the other hand it still looks like an okay bet at this point. >> finally, robert, i wonder, do you see anything on the horizon that could boost household formation? >> that would boost household formation? i think, you know, a lot of people are just waiting. i think one problem with household formation is, it's
that still exists among many people in this country. >> five years after the fact. >> we'll get cramer's mad dash as we count down to the opening bell. one more look at the premarket and opening bell in about nine minutes. why is our arizona-based company relocating manufacturing to upstate new york? i tell people it's for the climate. the conditions in new york state are great for business. new york is ranked #2 in the nation for new private sector job creation. and now it's even better because they've introduced startup new york - dozens of tax-free zones where businesses pay no taxes for ten years. you'll get a warm welcome in the new new york. see if your business qualifies at startupny.com
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atk spinning off its sporting group business to shareholder immediately that includes guns, and then merging the remaining aerospace and defense businesses with orbital sciences where atk shareholders will own about 53% of the combined company. >> this is a breathtaking deal for a couple reasons. atk is a leading provider of defense bullets. >> 14.4 market cap. >> a lot of people felt after the wind down ps in the wars in afghanistan and iraq this was a fabulous short. that has been a bad bet. management has been motivated to make a lot of money. the idea of splitting this up sporting goods guns, this company orbital sciences which has been undervalued, if you take a look that has missed the market and this is an example, david, of what i call incredible creativity on the part of ceos. to bring out value. >> right. >> nonstop. obviously attempted to bring up value it's been an amazing
performer. orbital science unhappy with its stock price and boom. >> splitting atk into two and merging one with orbital sciences, atk shareholders will own the majority of the stock that is tax-free, i believe that can be considered an rm it t reverse trust. and atk debt will stay with the orbital sciences deal, being well received by orbital science shareholders. >> where is the market going towards the financial engineering people like at pfizer, astrazeneca, and away from the pure growth that defined this market in the pre-amazon data. >> you will have a pure play bullet gun company i guess. >> a lot of people would like that. we know gun registrations are at a multiyear high. we know that this unfortunately is never going to go out of fashion and what i love about this, david, this company spun off by honeywell years and years ago, has just been without a doubt one of my favorite
companies i've written about in many books. this company is what i look for. i look for a company that is nonstop motivated to making you money. atk. >> we're going to talk about a lot of other stocks and don't forget brian robert, meg whitman, howard schultz, all coming up on the big show, opening bell after this. to prepare our kids to compete main today's economy?way woman: a well-rounded education that focuses on science, math, and career training for students who don't choose college. man: and that's exactly what superintendent of public education tom torlakson has been working on. woman: because every student needs the real world skills for the jobs of tomorrow. man: torlakson's career readiness initiative is helping schools expand job and technical training across the state because it makes a difference. woman: so tell tom torlakson to keep fighting for the career and technical
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from td ameritrade. you're watching cnbc "squawk on the street" live from the financial capital of the world on this tuesday. the opening bell in about a minute or so. earnings kicking too second gear here after a relatively light day yesterday. we've not gotten to coach. 68 cents beats by 7 cents although north american comps down 21. >> it's difficult for me. my travel trust thought it was going to bottom and it hasn't. it's very difficult to come back from 21. and i think that what epps now is even though it's a new ceo, you have to call into question the viability of a company that could have down 21 numbers. jc penney, china's numbers are strong. they dug themselves into a hole. i don't want to say they can dig
it out next quarter. this is not a quarter hold. this is a multiple year hold. you can't just come out and say, you know what, our handbags are strong. they're not. >> the most googled handbag michael kors as courtney reagan told us yesterday. a look at the s&p 500 at the top of your screen. down here at the big board it's oracle unveiling the oracle solaris 11.2 operating system today. a former nasdaq name that made the move. >> larry ellison one of ours. i want to point out this is the old world coming into the new. when people see these softwares service companies come down, a lot of them were gunning for oracle. they come on "mad money" we're gunning for oracle. oracle is offering a suite, not supposed to be, supposed to cut into the gross particular begins, suite of products. software service for the coffee room, dining room and what --
these are obviously facetious extensions of what we're seeing, human resources, information technology, we have one the other day for global payments, oracle is offering a one-stop solution and i doubted them and wow, they've really kind of come on in the cloud. >> remember the cloud is low margin. >> very low. >> and ibm, you know the fight of the soul of ibm. >> obviously amazon web services we know is largely the other revenues in amazon. again, what, sh, 1.8 billion in u.s. constantly bringing prices down when it comes to that. really it's all about the services you put on top of the cloud. the cloud is simple stuff relatively. it's what you combine. >> sales force.com. >> what work day does. those are the -- that's the value added. >> they have 60% growth and they would tell you they're winning every time an oracle contract comes up they're in the bidding. people thought oracle was going
to kind of roll over and play dead. that's never been oracle's style and mark herd is in there riding herd too. >> and there's another guy that he doesn't really back down. >> he doesn't back down whether it be a race on the sea or business. he's a brutal competitor. ibm, look at ibm. remember ibm reported the most horrible quarter in show and then what happened? warren buffet one of our 25 comes on air and says i'm not backing away from ibm. the stock has been a one-way ticket up ever since. old tech, reclaiming the mantle. don't forget microsoft using the word cloud three times before they get to windows in the conference call. >> yes. windows purge quarter. >> over at the nasdaq today, in for monica is a provider of data inste gration software did ring the bell. they raise guidance on some north american demand. you've been talking about strength in trucking. >> truck truck truck. >> at least a year. >> revenues up 25 in north america. >> all you had to do was listen
to klaus kleinfeld on that alcoa call where he's called out trucks as being the strongest of the companies, of the divisions. when you think trucks you should think cummins. >> although india and australia were considered weak and international in general relatively flat compared to what's going on here. >> renaissance in america, caterpillar took back the night. remember the united states had been a big drag. >> right. >> residential -- nonresidential construction, highlighted and energy for cat, you're going to hear energy for cummins. caterpillar is not done going higher. remember david, what they were doing, appro po of april of 2000 people were shorting s&p and going long wild growth. it's the opposite now. >> just like that. changed february 28th. stock moves up to suddenly
nobody likes the fact they're spending anymore. >> heavily for china. >> when did that change with amazon also. you're right. >> couple things i want to get to -- >> it can change back to. i don't want to make it sound like -- >> it can change back to. allergan, so many reports involving allergan as you might expect yesterday. one service reporting that they are at least considering shire which would be a tax inversion. >> right. >> another this morning reports of santa fe or j&j. if you are allergan's bankers, the annual meetings next week, they have time, that is one thing they have at this point. there's nothing coming on at the meeting that's going to force their hand in any way. if you're their bankers at goldman sachs and b of a, merrill, you're going to knock on doors, you're going to be happy to have that get out there, and put pressure on valeant to have to raise the bid if you do sit down to discuss it and try to hammer something out with them or come up with a
viable alternative. the question comes back to tax inversions and the rate. if you are a company that is not inverted, for example, how are you going to be able to get the same synergies and/or cost savings, the synergies between valeant and allergan are significant and that tax rate which will come down perhaps high single digits which is higher than valeant's current rate, how do you compete with that is a question. on the allergan side if they were to try to do their own buying shire, remember to do an inversion you need to issue over 20% of your stock. if you issue over 20% of your stock you need a shareholder vote and so if you're allergan you might be stuck in the position of okay, we need a shareholder vote to do the shire deal f it gets turned down, my shareholders are telling me to do the valeant deal. that's something else to keep in mind. >> why do companies -- why is j&j, one of my favorite companies, going up on rumor they might be getting involved on the fact they can't do an inversion. >> i don't know. nothing stops them from why not
talk. >> people like acquisitions. >> can you distinguish between pennsylvania law -- the last time i saw someone just say no was airgas. any way allergan can just say no? >> i think it's going to be difficult for them given the move up in the stock price. >> really? >> without doing anything. you're talking about an unaffected stock price of 116. that is the slight bit of risk for bill ackman. many saying he took virtually no risk and made a billion dollars in a day but the risk is they do although i would argue it's pretty low they will simply be able to say no, thank you. its is incumbent on them to do something. >> every day shire up. yesterday i heard shire was -- i'm sorry. we have a lot of breaking stuff. >> speaking of ackman apparently the hatchet has been buried between ackman and carl icahn. >> in each other's heads or actual. >> ackman spoke with icahn's assistant saying i'm calling to forgive him. he said, he didn't see anything illegal about bill ackman's
pershing deal with valeant. what's next? get them on the air together? >> greenberg on the street called a hail mary pass to get rid of the dividend and buy back the stock. i see ackman say you know what, i don't hate herbalife as much as i thought i know the hatchets will stay buried. this could be a cold war hiatus. >> not unproductive for both of them to be at each other so much. carl last week was the one that started it by referencing marty lipton originally and saying well, the enemy of my enemy is my friend. >> there's glasses nose between parastrike ka between the two. >> real quick on sprint, jim, which i know you're "mad money" viewers follow closely. the stock is up a bit, average revenue per user coming down. the ebitda number was okay. dealing with an accounting change and they've lengthened the time in terms of the service
plans and the equipment and so that has had a beneficial effect for verizon or at&t or sprint. >> this is the first one that's gone up in this class. everyone has been worried t-mobile will come in and say we're going to slash and burn. >> the key question continues to be, frankly, when and i believe it's when, not if, ma sa sun which controls sprint will try to get a deal done with t-mo. that they will bring the regulators in and get in one of the ugliest fights of all time with tom wheeler. want to talk about burying hatchets that will be good. >> working on sprint during the break. >> you were? >> did i blow away -- did i stop trading? >> yeah. >> sorry. >> i have a new stop trading. >> a couple more where that's coming from? >> if you're not watching, i got to tell you something you're going to be like what did i miss? you will have. >> all right. >> i'm going to be there right here at this seat. >> we have no choice. >> well true, but we're joined at the hip.
and those who think i'm fighting with him, could you please tell people i actually like him. >> i will make that clear. it's all for the camera. merck doing its part to help out the dow and bob pisani is on the floor. >> got a nice move. dow up 67 points thanks very much, carl. energy moving nicely, aerospace stocks doing well. biotech doing well today. health care on the upside. lot of sectors moving. gold stocks the only to the downside. my e-mail is full of sell and go away, stage commentaries. everyone says worry about may. can i point out for the last four years, may has been a crisis month, every one, and i'm not saying sell in may and go away doesn't exist but i'm saying, it's been greatly exaggerated by the crises we've seen in the last four years in may. 2010 we saw a euro debt crisis in may, 2011 portugal greece prices, 2012, greece was going to exes it the euro and everything, the euro was going to fall apart. that was all in may.
2013 bern nar ki talking abe the fed going to taper and interest rates moved up. what's the crisis in may of 2014, some saying it's going to be the ukraine. it's exacerbated by the crisis so don't automatically think may is going to be necessarily a down month. let me move on here and talk about what i'm concerned about. everybody knows about the drop from biotech from their recent highs. everybody knows about gold miners down from their recent highs. i'm a little more concerned about what i am seeing in home construction stocks down 11% from their recent highs, bank stocks are down 7%, airlines are down 5% and even semiconductors a leadership group down about 4%. those concern me more. home construction banks, airlines and semiconductors a lot more than biotechs and gold mining stocks off their recent highs. that's what i'm watching particularly the bank sector right now. let's talk about earnings for a minute. i want to point out a couple
companies, mgm had great numbers. they did well. for all the talk of makau, 65% still in the u.s. parker hanna fin, coach a disappointment they were on the light side good year tire on the light side. before i toss back to you, david, we're still don't have any announcement from any ipos. nothing from alibaba. this goes on another week definitely ipos will be on a hiat hiatus. ibm annual meeting today. >> good call. >> thanks very much, bob. you know, one thing that has not been on a hiatus is merger and acquisition activity. i wanted to come to another industry talked about about a month and a half, two months ago as a consolidation play. it's been quiet since. perhaps shouldn't be based on what i'm hearing. i'm talking tobacco. >> yes. >> where you've got bat opening 42% of reynolds and expiring in
july and continued rumors about reynolds buying laurel. what i can tell you at this point, there is a lot of activity amongst bankers and lawyers involving potential consolidation and a lot of it seems to revolve around laurel hard and reynolds and what would have to be a divestiture of reynolds of significant brands in menthol because laurel hard, 80% or so of its sales come from the new port brand of menthol cigarettes. that's a great brand. if you reynolds and want to buy laurel hard you have to divest cool, winston, maybe salem, in order to get past the anti-trust regulators and a lot of the conversation that seems to be going on right now, seems to be focused on the potential divestiture or possibility of finding buyers for those brands. >> those prior to embarking on a potential for reynolds for laurel hard.
still around speculation. i can tell you there's a lot going on but i can't tell you there's going to be a deal. bonny herzog comes out again, she said a number of times, laurel hard/reynolds combination continues to be in our view, says herzog, reynolds american can pay up to $80 a share for laurel hard would incorporate synergies and cost savings of $400 million. that merger would increase sales, greater retail leverage and help maintain a rationale competitive environment and you saw some of the brands in question there. b.a.t. would probably sign off on such a thing as an honor of a significant amount of reynolds. >> ibm raising dividend as we talk and one of the things -- my value added on lorillard, the esync business, since the fda has told you what the deal is, lorillard's e-sync business is the fastest growing part of this market. lorillard is the only major
company that has e-sigs. they can afford to lose cool, a great brand -- no great brands if you're from my house but this is e-sig generated too. i think lorillard is worth a tremendous amount -- >> again this is another area of consolidation. we will focus lorillard shares had moved up in march when the early reports came around. it's been quiet but not quiet when it comes to at least the talking. let's head to the bond pit ps rick santelli at the cme group in chicago. rick? >> thanks, david. maybe the best way to look at tens is a two-day chart because we're virtually unchanged in all maturities from yesterday. the game becomes to the 2.66 close on friday. up five basis points. there's your geopolitics in action. february 1st chart, really shows you we're in a range pure and simple, most likely 2.79 to 2.82 is the top of the range. if we look at another area that i think is more important, our yields versus boon yields 9.5
year wide. right now where it's trading, 121 basis points separation. here you can see the chart going back to october of 2005. the ruble, the good way to assess what's going on geopolitically, dollar versus ruble for twos days, dollar down down. if we look at it since march 1st, cry mea referendum was mid-march. there's what it looks like. the dollar continues to be lower from that chart as well. maybe the area we should pay most attention to is in our backyard the dollar index. here's the year to date chart. i know that when it comes to the yen it's a separate ball game but whether the ruble or the wan, a lot of tug of war going on with the dollar. it consistently has been trading under where it closed 2013. carl and david, back to you. >> all right. rick, thanks so much. when we come back, buffalo wild wings ceo sally smith on her company's better than expected numbers. we'll tell us what she's working on. your pizza concept.
we got a wild within here. shares of buffalo wild wings trading higher after first quarter earnings easily beat estimates top and bottom line. here first on cnbc is one of my favorites, 21 ceos sally smith, great to have you on the show. >> thanks, jim. always great to talk with you. >> all right. sally talk about a couple things. people were betting against you. we talk about how foolish that has been. you had raw costs go down because of wings, top line go up because of march medness and olympics. secular trends or cyclical in wings and secular for sports? >> everything came together really in the first quarter. certainly our revenue beat strong same-store sales. we opened strong restaurant openings on our new restaurants or average unit volumes are exceeding our same-store sales
and some of the lowest wing prices we've seen in a while. >> a couple things, carl mentioned a concept, these are the new legs of buffalo wild wings. he mentioned pizza rev. i see the emerging and international coming on. i see you are doing things to make this brand go international not unlike mcdonald's. is that really a better road map than right now than in the u.s.? >> >> i think we have both opportunities. we said we think we can have about 1700 units in the united states. we're just at a thousand. plenty of runway there. we've been working on international for a couple of years. really trying to find the right partners. there's a huge demand for american brands internationally. that and emerging brands which we think is an opportunity to continue to remain a high growth company for the long term. >> all right. why the switch, coke to pepsi? >> we thought that pepsi really met what we were looking for as well as what our guests are
looking for. they have strong beverages, mountain dew being a favorite among our guests as well as some of their partnerships in sports and nfl. their sponsorship of the nfl plays right into our experience and what we try to give our guests as a great football viewing experience. all in all a win. >> all right. sally, really kind of heralded you guys as also early adopters of technology. how much did social media do for you this quarter and electronic tablets on the desk top? >> we've had a presence in social media for some time, whether on, you know, one of the dotcom sports events. we're also rolling out tablets in all of our restaurants. certainly for orsdsering which will come later in this year, but our guests can come in and get the latest sports news any kind of news, they'll be able to certainly they have or cads and games -- arcades and games, another reason not only for
sporting events but another reason to come into buffalo wild wings. >> you gave a preview of same-store sales were excellent. of even the first beginning of the next quarter seems like the same-store sales are consistent and no point did i notice anything involving the weather at your company. >> well, we think that if other restaurant groups are having weather issues we're probably having those as well. but we have a strong operations team and our philosophy is if they didn't come in yesterday, you better get them in the door today. it's really hard for us to tell if weather is impacting us, you know, guests will come out if there's a great sporting event op. >> well, sally, once again, fantastic delivery. those who bet against you -- >> jim, thank you. >> sally smith who is the -- the person in charge of buffalo wild wings. >> and they just delivered a lot of wings to the exchange. >> they did? >> i've been told to thank her. >> spicy. >> over by the balcony. you're about to get off the show. >> that's good. that's a good wing right now. feels like around 1:00.
>> absolutely. >> we'll get stop trading with jim in a moment and tomorrow, the ceo of twitter, dick costow lo will join us. the quarter, new initiatives, whether or not they drive tv ratings and more. dow up 87 and the utilities a fresh intraday high. >> "squawk on the street" is back in a minute. ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪
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comcast business built for business. time for cramer and stop trading. going back to the well on the time. >> one of america's great doctors, also my doctor, on cbs in the news talking about the american academy of neurology saying we have to go all-in marijuana, all-in marijuana for ms, for epilepsy, all in marijuana for pain, cancer. only one company that has a product that people respect and that is this gw pharma, down a lot from its high, billion dollar uk company. what happens to uk irish companies in the drug business, you can't do experimentation on marijuana in this country because it's a class one issue but you can in england. this is the company that is going to solve a lot of the pain problems. don't forget, digitalis is from
fox club. people always developed drugs plants. >> second time you mentioned that name. >> i believe. if you want to know go to the morgan stanley piece dated april 22nd and the street.com on the piece about how it could be used to combat autism. >> tonight on "mad"? >> okay. we got the triple, we have underar mur kevin plank going to see him, lot of tremendous guys, spirit, ben ball danza, if you walk into the airport you're going to get charged. >> charging for overhead bins. >> charging for overhead mind shirt. thinking going spirit. costs me ten dollars and eaton i cannot believe this show and our network. i'm proud. >> we're going to miss you next hour. see you tonight. >> he's coming back. >> coming back. >> yeah. >> triple latte, i got to have a triple cappuccino swim wet. >> also consumer confidence in just a moment. oment.
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since january of 2008. so consumer confidence at least from the conference board, holds its wafty levels much has probably to do with the resurgence in stocks. sa sara, back to you. >> thanks very much, rick santelli, on the breaking can consumer confidence. we'll start off with one of the big movers of the morning, coach. shares of the luxury retailer down sharply today after the company's third-quarter results. courtney reagan back at hq with all the details. what happened at coach some. >> nobody expected a strong quarter out of coach but demand for handbags in north america especially weak for the legacy accessory maker. coach beat consensus by 7 cents, reporting earnings of 68 cents a share, profit still down 20%, revenues came up short at 1.2 billion. north american same-store sales down 21%, worse than the expected 15% drop. north america is the lamgest market for coach and largest problem too. international sales rose 14%, with sales in china specifically
strong up 25%. but you isolate north american sales and get an 18% decline year over year. new ceo victor luis blames north america sales on weather and late easter. though on the conference call executive says they don't see any improvement in u.s. comps in the current quarter and expect sales to fall about 10%. weather and a late easter don't explain that. beyond q4 he refers twice in the release to excitement around the fall collection led by new creative director. on the conference call coach says it hasn't tested any of the new product. cnbc contributor stacy widlet says no pressure, stuart. believe it or not, not even though shares are down more than 8% right now, the street may be giving coach a pass on the terrible quarter because so many are looking towards the influence that shoppers will finally see in the fall for the very first time. coach shares have traded in a relatively narrow range over the pass three months. weather and all, that is, of
course, until today when we got more of those details. simon some. >> thank you very much. >> in the meantime the market up 89 points, the dow up 89 points and the strong running coming from the base yesterday. analysis on where the markets in general are going, jordan is managing director and portfolio manager with matrix asset advisors. jordan, good morning. >> good morning. >> we keep getting these very big swings, but at one point yesterday it looked like on the s&p 500, we were going back to exactly where we started the year. four months in, we've overall gone nowhere. what are you telling your clients? >> well, we think that there's going to be a fair amount of volg tillty this year, more so than last year. we expect for the full year, the market to have returns similar to historic norms, 8 to 10%, that would be including dividends, but we do think that individual stock performance and selection will be much more important than it's been in the last few years. so it pays to be much more
selective. we wouldn't chase rallies like today. instead we would rather try to be more selective and pick stocks up on dips. we think it's likely there will be some type of a correction during the course of the year, created by some type of macro event. and we would not be excited to be in long-term bonds because we do think that rates will move up over the course of the year. >> what does that mean, some sort of macro event? >> well, who knows. it will be some kind of exogenous event, could be something as simple as russia ukraine becoming more difficult. >> okay. >> don't know. something out of the ordinary. >> i wondered if you were going to say growth is disappointing and perhaps won't get the growth the market assumed. if you look at what's happening in the market you have strong rotation. we've spoken many times about the high flying tech stocks, biotech, social media, that have lost a huge amount of value but you see weakness in housing. in financials.
economically sensitive areas, the utility index is pushing up towards an all-time high. what do you do with that rotation? do you follow through? >> well, we look at the individual companies and their own valuations. so we think that some of the high flyers, which have come down, are still at fairly lofty valuations and hard to justify. we contrast that with other old technology dinosaurs like microsoft, cisco, hewlett-packard, where their actual results have been quite good and their valuations are very attractive. so we wouldn't necessarily look at the rotation in a kind of a sector base. we would look at individual stocks and where they are most attractive. >> do you need to strategize based on the return of m&a activity we've been seeing, the mega deal is back, clearly health care, pharmaceuticals have been an exciting place for deals, but do you want to target another group of stocks where you see we might see more activity? >> well, there's the potential for activity we've seen in terms
of size, almost any size company is vulnerable. we do think that there could be some consolidation that could take place in the consumer products names where growth has been a little bit more difficult but there are a lot of synergies by combining companies together. >> do you want to name some names for us, jordan? >> we don't speculate really in specific names when talking about takeover targets but we do think that m&a activity will be supportive of a lot of stocks that just haven't really participated as much. >> so, jordan, the federal reserve is meeting. we have a lot of data tomorrow. we've got the gdp data for the first quarter. friday the employment report. and still you have the fed that is presumably going to continue to cut back on the taper. is that money printing eases back into the second half of the year, are you confident that the market can still return the sort of gains that you are expecting, despite the fact that the
liquidity from the feds will be drain? >> well, i -- the accommodation will be eased somewhat, although we don't think interests are moving -- interest rates are moving higher soon. the general interest rate environment will still be very -- will make stocks be very competitive with bond investments. there will be some lower liquiditity in terms of general support to the markets, so maybe some of the frothiness may come out, but again, individual stocks, individual companies, are performing well. we expect the economy to continue to perform well and we think that's the reason why interest rates will eventually move up because stocks and the economy are doing well. >> thanks for the advice, jordan. nice to see you. jordan poser joining us from matrix asset management. >> 86% of tuesdays this year the stock market has gone up. >> how do you know that. >> dave lutz e-mailed it. >> strip out tuesday, stocks are down 8% for years. >> can we strip out mondays as
well. >> how about that. >> and wednesdays and thursdays. >> just come in for fridays. i like thursday, the anticipation. >> we have a big show coming up. howard schultz is here at the nyse. a member of the cnbc 25 list. plus number 18 on that list, meg whitman, we will hear from her about what made her a success and what she thinks is her biggest mistake. the ceo of our parent comcast, brian roberts will join us live and talk about time warner, liberty media and a lot more. dow is up 85. "squawk on the street" will be right back. right back. [ bagpipes play ] make it happen with fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity.
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welcome back to "squawk on the street." alliant tech systems, the largest ammunition maker, said it will merge with orbital science after spinning off its sporting gun business. in addition to ammunition and guns it makes small and medium space rockets for the military and government uses. trading up 21%. alliant up big trading up about 8% on the day. carl, back over to you. >> dom, thanks a lot. in celebration of our 25th anniversary cnbc's created a list of the 25 most influential and transformative people in business in the last quarter century. earlier today, we revealed that list and how they were ranked. all day long on cnbc we're telling their stories. reported by tyler mathisen who joins us back at hq. >> thanks very much. tough, competitive, with a bristoling dare i say electric skl intelligence, perhaps the
most iconic ceo of the past quarter century, studied in business schools, imitated by successful business people around the world, he's also number 12 on cnbc's first 25. ♪ >> he's the quintessential celebrity ceo and a business icon. jack welch wrote the book on leadership on how to wake up a sleeping corporate giant and books have been written about him. more than 25 of them, all trying to explain the welch way. >> i don't think you can take a ceo and teach them some of the things that game naturally to jack. i think he was born with those gifts. >> "today" show host matt lauer has known welch since 1992p. lawyer lauer was a young news
caster and welch his boss, chairman and ceo of general electric. >> jack is one of the most competitive people i've ever met. there's no question about it. in business it's legendary. jack wanted to win. >> jack is one of the ultimate industrialists of our time. took this massive company, founded by edison, are you kidding me, and just made it ruthlessly efficient, right. >> when you worked with jack, you wanted to work. you wanted to execute. you wanted to take whatever you were doing to the next level. >> welch became ceo of ge in 1981. it was a slow and steady profitable behe must with $25 million in annual revenue. the young maverick, just 45 years old, immediately started reshaping the company. >> jack set the standard for deciding which assets to keep, which ones to jettison. >> out were slow growth businesses like small appliances and tvs.
welch could see the japanese were taking over in those industries. he spent billions moving ge into services and technology. he cut the payroll by 100,000 people through layoffs and divestitures, earning him the nickname neutron jack. >> i think neutron jack referred to that the building is still standing but some of the people are gone. >> and the neutron jack label was about being insensitive and uncaring and i will tell you in my personal experience those are two words i would never ever use with jack welch. >> the merger of general electric and rca is an excellent opportunity for both companies. >> arguably the most important deal of welch's career came in 1985 with the $6 billion purchase of rca. with it came television network nbc. >> since general electric bought nbc they said they're not going to interfere with any of the programming. >> not true. >> i saw "miami vice" the other
night. tubs were busting the maytag repair man. >> welch launched a white collar revenution. he removed layers of bureaucracy, gave managers free reign and created a culture built around speed, quick change and openness. >> he understands how to inspire people and really find ways to take the best ideas that people have, and move them up and get everybody behind it. and that is a very special skill. it's a people skill. >> welch brought sick sigma to ge a quality program designed to remove defects from every function of a company. welch didn't invent it but no one had ever used it so broadly or effectively. >> which was basically an attempt to drive your errors on the production line to zero. you know. i mean talk about aiming high. >> consider welch did this with a work force the size of the population of pits burg.
>> you didn't want to let the guy down. he had a way of creating a loyalty in the people that worked for him where they would walk through fire for him. and i don't know how you do that, but jack had that knack. >> throughout the 1990s, ge continued to grow. its market value reached $410 billion, up from $14 billion, when welch took the helm. some questioned how those numbers were generated. >> a lot of its earnings power over really much of the '90s and clearly into, was a function of not of all of the things they were doing that you could see the light bulbs, the turbine engines, the health care business, but ge capital, which was effectively, a bank masquerading as all of these things. the earnings looked smooth. the smoothest earnings around. he would always hit his numbers and he was able to hit those numbers in large part because he had this money machine that was printing money behind him. >> after 0 years welch -- 20
years welch retired as ceo in september of 2001, trans formed general electric, changed people and made a lot of people a lot of money. ge was the most valuable company in the world. it's a run that earned welch the title "manager of the century" by "fortune" magazine. >> there are students in business school across the country learning the world of business as seen through the eyes of jack welch and using him as an example. >> he wrote the book on corporate leadership and anybody who's trying to run a big company has definitely studied jack welch to see how he did it first. >> i think his legacy will be, you know, summed up in a word like excellence. push yourself to be the best you can be. push yourself to help the people who work around you. go home every day being able to look in the mirror and say, i'm proud of what i did today. i accomplished something. i helped someone else. i made a difference. that's the way jack has lived his life and inspired others to do as well.
>> motivator, epic wealth creator, jack welch one of cnbc's first 25 rebels, icons and leaders. in the next hour the story of number 11 on the list here on "squawk on the street," a side note, we compete with him. tonight at 7:00 p.m., a special reveal of the top five. folks, back to you. >> that's a great spot, tyler, really captures him. i think talks a lot about as it should the generation of managers who are incorporating that blueprint that he essentially wrote. a big reason america is in the spot it's in. >> you think back to the early 1980s or thereabouts, that was sort of predated welch, but remember, it was all about japanese management style. dem iming druker and all of the pushing a japanese style of management. welch was an american original and one of the points that you and others made, was what a
motivator he was. he made you like a lombardi. he made you want to play for him. >> ty, wasn't just in this country 12, 13, years ago i hosted a q an a in a frankfurt theater in germany when he published straight from the gut. the germans could not get enough of what he was saying, particularly, of course, the idea which everybody spoke about at the time that you would challenge the bottom 10% of the work force. if they weren't performing basically shown them out at one form or another. that was a game changer in a way a lot of people felt about work forces. it may have had its day. i don't know. but it was very powerful at the time. >> i think that's really right. there are lots of ways you motivate people. motivate them through awards and you can motivate them through some fear as well and how you hit the balance of reward and praise and a little bit of motivating fear is the art of
very good managing. you know, i've worked at general electric owned companies for a long time, cnbc was owned by general electric for a long time, i'm not sure that lop 10 or 15% was followed in every business, every year, year in and year out. the truth was if you didn't perform, you knew you were on a short leash. >> one of the dynamics that's getting a lot of attention op twitter in response to that spot. thanks. we'll have a lot more with tyler's special tonight, 7:00 p.m. eastern tonight. some breaking news on housing. diana olick has that for us. >> that's right. the u.s. census bureau just reported that the home ownership rate fell to 64.8% in the first quarter of this year. that's the lowest level since 1995 and it's the first time we've seen it cross below that 65% rate. this number doesn't usually move very much quarter to quarter but it took a big drop down from 65.2% at the end of last year down to 64.8% and it's
particularly interesting given your interview earlier with robert shiller who talked about how prices were so high, but sales were lagging and he talked about investors in the market that were not speculators but that had come in and really put a floor under his market. investors own these homes. americans are not opening these homes. they are not coming back into home ownership the way we expected and as those investors pull out if we don't see the sales from regular buyers come back, we could see yet another downturn in housing. again, 64.8% the lowest level in 19 years. simon? >> diana, thank you very much for that. diana olick. up next on the program, it's been a rocky year for twitter. the stock sinking about 35% so far. how should you be playing it ahead of the earnings release tonight and perhaps more importantly the expiration of the lockup of $20 billion worth of stock on monday. latest starbucks ceo howard schultz live here at the new york stock exchange. we're back after a quick break. ♪
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twitter set to report first quarter numbers today. the street paying close attention to the company's monthly active users number which was an issue last quarter. morgan brennan live in l.a. with more on what we can expect tonight. >> hi, carl. twitter's second time reporting earnings and the street is calling for a loss of 3 cents per share on $241 million in revenues. that would be 110% jump in revenues from last year, but that biggest number to watch is going to be, of course, monthly active users. analysts expecting a 5% quarterly increase to 255 million. that's important because user growth has been slowing for the company. one reason we've seen shares tumble about 35% so far this year. so twitter has been rolling out product changes to lure more active users and actually to
re-engage dormant ones which the company calls its biggest opportunity. also keep an eye on advertising revenues. that's a bulk of twitter's business as the company ramps up its ability to cash in on the active users it already has. mobile will make up at least three quarters of that. expect lots of hype around mo pub the mobile ad network the company is leveraging on and off the twitter platform especially since there are the rumors that facebook will unveil its own competing ad network tomorrow. data licenses, that's another revenue stream ta could get bigger now that twitter has bought ganip. other acquisitions two for tv and twitter's first major stock lockup expiration next month. shares of twitter trading up over 1%. but still, well off its $74 high from december but still above its $26 ipo price, carl. >> morgan we'll see what happens tonight. of course be sure to tune in tomorrow when twitter's ceo dick
costolo will join us live for a first on cnbc interview 9:00 a.m. interview and being twitter tweet us with the #asktwitter with your questions for cos toe lo, tomorrow at 9:00 eastern. >> straight ahead container store shares are falling sharply. the company blaming harsh winter weather for a difficult fourth quarter. the company's ceo and cfo will join us live for the first reaction to the results after the break. at your ford dealer think?
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check out shares of container stores sharply lower this morning down almost 6%. profits surging but fall short of what analysts were expecting for this company. that rough winter weather hitting same-store sales. joining us from dallas, texas, first on cnbc, container store ceo kip and chief financial officer jody taylor. welcome to you both. >> thank you. >> glad to be here. >> kip, i don't know if a lot of people realize this, you have been leading container store since 1978. have you ever seen a winter like this impacting the retail business? >> no. in 36 years this is the worst winter we've ever had. 33 or so years of our all-important sale this is the worst weather we've had. you know, we can't control the
weather. the 28 stores that were most impacted by weather we have 65 stores, the 28 that most impacted by weather had a comp store increase of 7 points higher than the stores that were not impacted by weather or not impacted as much. we still had like a 12.3% ebitda for the quarter in spite of that over7% swing. so weather, weather, weather, we don't like to be able to talk about weather but i think we have to this quarter. the other thing that's interesting most retailers have a very poor january, february. at the container store that's our alpha store, our most important two months of the year. we're ready to be past the fourth quarter. we still had an average ticket increase of 6.5%. something we can control. and, you know, the mean wicked witch is dead and we're on to the next quarter feeling great. >> i want to talk about the ticket sale or average transaction but jody on the weather, what happens to the sales given it is such a
critical period for container store, are they lost or do you expect them to come back for the rest of the year because of pent up demand? >> you know, that's great question. for us, as kip talked about, the fourth quarter includes the period of december, january and february, and we have a really unusual pattern of sales where january and february are when we conduct our annual alpha sale. so we have over 60% of our profits that are derived during the fourth quarter. we're confident as kip said as we head into this fiscal year. annually we feel we're heading into the right direction. we've got a lot of really great things going on here and we think, you know, our loyal customers continue to adore our brand just like they have always. >> well, you know, we -- a lot of very positive things in the fourth quarter. the only bad thing was that the stores were closed a lot. so, you know, the traffic was down because of the weather. every other metric we follow closely we're encouraged by for
the fourth quarter. and i'll tell you what, i'm kind of looking forward to the fourth quarter this year i'll gamble the weather won't be like that again. >> hopefully you're right for all of us. we felt it here too. kip, you mentioned one of the positives 6% increase in ticket sales or the amount per transaction. what would you say is the reason behind that? are you raising prices or is this a sign of economic confidence? consumers spending more? >> no. it's more items in the basket. we're one of the only housewares companies, retailers i know of, there's one or two, people use shopping carts and there's another item or two, our average item costs about $7. there's another item in that shopping cart. it's better salesmanship on the part of our great high service employees, we're an employee first culture. spend 280 hours a year training our employees and so you can control average ticket. you can't control the weather. we're just proud of that. i think it does show a little
bit better consumer behavior in that they're buying more items per trip and we look forward -- we think that will continue this year. >> you know, kip, the analysts say that sometimes wall street will ignore the longer term opportunities and the fact that your stock is down 35% so far this year, sets it up for a great entry point for what they believe is one of the best growth stories in their coverage. i guess it comes down to the idea as to whether you should have ipoed in the first place, because now that you're in the public market you're going to take a lot of pressure when you have a quarter like this, that you wouldn't have done if you had stayed off the public markets. do you think it will change your behavior? will you end up having to do things that you might not otherwise have done, as a growth story? >> no. we're going to manage for the medium and long term and that's why hey, fourth quarter, weather weather weather, we're looking forward to this year. we have 65 stores as we stated we think we conservatively have
over 300 stores in the united states alone. we discovered something in the last couple years that by putting stores in markets the size of indianapolis, raleigh, charlotte, that sort of middle million and a half greater metropolitan area, our sales are almost as good in those stores as in the l.a., chicago, atlanta, dallas sized markets and the cost of real estate there is so much lower that we're getting like 23%, four walls ebitda out of the stores. never before have our new stores contributed so much to our profitability. so we've come out here in the last couple of days and said look, we've given 10% square footage guidance and we're raising that to 12% square footage guide an and what we're hoping is with continued macro economic improvement we'll get more retail real estate development improvement too. the more retail real estate development taking place in the u.s. the more turn key our
locations become and with the same finite supply of capex dollars you can open more stores with the same amount of dollars. another thing is that before the great recession, we weren't as attractive to the best develop and the best centers. now it takes 35 years to reach this point. now we're the first call by the best shopping centers, best developments and that's exciting too. we want more retail real estate development. >> kip, we've got to leave it there. i know you're hoping for the growth and saw that in the call also for the better weather. both of you thank you so much for joining us from dallas, kip and jody of the container store. >> thank you. >> coming up on the program, starbucks ceo howard schultz will be live here at the new york stock exchange. you don't want to miss that interview. we're back after a quick break. . those little things still get you.
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all day today on our network we are revealing the top 25 rebels, icons and leaders for the last 25 years. these are idols, people who made the most profound impact on business finance since 1989 when cnbc went live. who has had a bigger impact in terms of the corporations and the stocks some i don't know. how about this guy, howard schultz, the chairman and ceo of starbucks and a member of cnbc 25 list. congratulations. 14. you apparently met with number 7 before you came here. >> got good intelligence. spent the morning with oprah as we introduced oprah kchai. i'm humbled and honored to be on the list. >> your background what is inspires a lot of people. you did not come from silver spoon environment where it wasn't a lot of risk to get started, did you? >> i think we all carry our childhood experiences with us. i grew up in a poor family, projects. i think that's well documented.
i carry that with me every day and candidly i carry the scars of being that poor kid in the fear of failure. that's what drove me all these years. >> at the same time you have installed a safety net in 20,000 stores for the videos who work there? >> i -- individuals who work there. >> i have tried to build the kind of company my father never got a chance to work for. education, health care, equity in the form of stock options and more than anything else, demonstrating that you can make a profit and do good things for other people. >> this is important because i think a lot of people have said you know what, maybe business isn't such a good thing. business got a bad name all lumped together and yet the profit experience does not necessarily exclude treating your employees well. >> i think we learned early on as a consumer facing business, that our customers would respond to what we were doing if, in fact, there was transparency and they understood what we stood for. and as a result of that, i think we have made more profit and built more shareholder value by
demonstrating that success is best when it's shared. >> at the same time, you've had reversals. i remember you calling me -- >> oh, god. >> when you came back. it was brutal because you had take an leave of absence in 2000. your company, you've never wanted -- you wouldn't do it. i was begging you for dump on people but that wasn't your style. you came back, disappointment turned back into greatness for shareholders and people. what is it like to watch your baby, kind of fall on hard times and resurrect it. >> i remember that phone call. thank you. you were tough on the stock. that's why i called you to say listen, i respect your opinion, you're valuing the stock but we're going to turn things around. this is about love. this is about responsibility. >> about love. >> this is business but love. >> it is about love, humanity. the difference between perhaps others and what i try to do is i take this so personally. and our people take it personally. when you are personally engaged and you're not going to be a by stander you have to will things to happen. in 2008, the whole world was
against us and we said we're going to show up and show up every day. >> now, let's talk about the idea of what happens when i go to starbucks, you go to starbucks. i get my triple venti cappuccino. someone last week said can you pick me up a dirty chai. everybody's own starbucks. a dirty chai. what is the secret menu and posted menu at starbucks sfla. >> i don't think we ever planned for people to start ordering things that were not on the menu. what's happened is one of the keys to the success of the company has been the ability of the customer to customize. and that customization has given rise to things we never believed were possible but also a credit to our people for being able to make it. you can make your own starbucks in ways -- i was just in last week, i was in indonesia and i walked into a starbucks in bali and i walked in and i heard people ordering things that i've never even dreamed were possible but again, it's the local relevancy of starbucks around the world now in 64 countries.
>> local relevancy has to do with something that is uniquely american capitalist and i want to talk about with you. the world's changed. we were enemies with vietnam for substantial portion of the -- of vietnam's existence. vietnam is now a remarkable country for starbucks. talk about starbucks capitalism and how it's changed relations with countries. >> you know, i think one of the great things that business can do, where politicians perhaps can not, is that we can introduce things that are american, that are western, and be a bridge and be in a way allow people to understand nous a different way. we're opening stores today in vietnam. i was just in cambodia. hard to believe. >> cambodia. 2 million people slaughtered, a terrible tragedy, people felt we looked the other way and there's no animosity. >> there is still a halo on america and i think a business can carry that flag. >> in the meantime you're not
stopping. i was shocked when you said you're going to give troy a little bit of the day to day a remarkable manager, an you're now thinking about big picture technology. not just coffee. >> here's the thing. there's no consumer brand on the planet today that can endure and succeed unless it is being integrated seamlessly with a digital social and mobile strategy. we are leading in mobile today but that lead is not something we're entitled to. we have to constantly reinvest, not embrace the status quo and we're going to build a mobilized business we think is going to be significant in the future. >> among the new initiatives, there's so many going on, nighttime day part, lunch day part, technology and conceivably white label of technology given to other companies. you have consumer products goods you have not talked -- i have not asked you about. >> don't forget about tevania.
>> which you rank these are going to produce both long-term and short-term results that will drive the results? >> my answer might surprise you. starbucks is still the core business and i think the growth vehicle for the company. people will be surprised how many stores we will be able to open. however we're sitting with 350 tee vanna stores, well over a thousand there's going to be. there's going to be tee vanna stores outside of the u.s. but the mobile platform and what we're going to be able to do with digital technology on the starbucks mobile platform i think is going to surprise people. >> the thing i'm worried about. >> please. >> put to rest my equkwaums. sam walton one of the great previous generations always wanted to get in that pick-up truck and visit his stores. you can't visit 20,000 stores. how do you know the quality stays whole. >> that's a fair question. the company is completely decentralized by seasoned people running starbucks that understand the culture, values, understand the customer is most important. we are all visiting stores every
single day. we are not sitting in some white tower in seattle. we are in the mix in the mud with our people doing everything we can to exceed their expectations and the expectations of our people. jim, i'm telling you, there may be bumps along the way but i promise you starbucks coffee company just getting started. >> our country is great but do they have enough thinking terrific people to work both the day part and night part if you roll out beer and wine. rolling out a thousand stores. maybe all stores. your stores will be working all the time. is there enough management talent for you? >> we want to leverage the fixed asset. we've got a pipeline of great people. our people are the ones driving this innovation. they're the ones coming to us saying let's do these things. we're going to do it a thoughtful disciplined way. introduce car by nags this summer, all things we've tested for a year. nighttime we tested for two years. this is nothing new. doing all these things in a thoughtful disciplined way. we're not perfect. we're going to make some
mistakes. over the long term starbucks is here to stay and best years are in front of us. >> i have to know this, we all know luck can play a role. you do you have lucky charles, anything related to chance in your background? >> the luckyist thing that ever happened to me is i was born here in america. but i think yeah, we have been fortunate we have been blessed but a great line and i think it's true, luck is a residue of design. >> wonderful. really figured it out. any message to our viewers, someone in the top 25 gets to have the camera and says his peace. >> i would say to all young entrepreneurs dreaming big dreams don't let anyone tell you, even your families, your dreams cannot come true. i'm a kid from brooklyn the other side of the tracks and this is no hollywood movie and your dreams can come true. keep working hard. provide yourself with a great education, surround yourself with great people. >> leave it at that. thank you so much, howard schultz, for everything you've done for the world. >> thank you.
>> for the world. >> thank you. back to you. >> jim and thanks howard. of course that was howard schultz, number 14 on the cnbc 25. don't miss our special coverage tonight. rebels, icons and leaders, airs 7:00 p.m. eastern time. when we come back another member of the cnbc 25, meg whitman about what she has to say about her success in the tech world. dow up 76. we're back in a moment. ♪ [ banker ] sydney needed some financial guidance so she could take her dream to the next level. so we talked about her options. her valuable assets were staying. and selling her car wouldn't fly. we helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today...and tomorrow. so let's see what we can do about that... remodel. motorcycle.
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see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business built for business. welcome back to "squawk on the street." check out lenders cit group, near session lows right now for the business lenders, first-quarter profits fell by 33%, as its margins sank and set aside more money to cover future losses in loans. the ceo calling it a disappointing quarter. simon, near session lows, back over to you. >> thank you very much, dom. high time we had rick santelli in the show. let's cross over to chicago. >> thanks, simon. there's two things in the news today that really grabbed my attention. the first was, and it should be no surprise, today is the first of a two-day fed meeting. but the other was apple. now, there's a lot of talk about apple out there, but what caught my eye was, first of all, about the beginning of the month they had, what, 140, 145 billion,
about 70% of that's overseas. and today, they announced a multitron debt offering. keep in mind, it's been about a year since their debut debt offering, 17 billion. now, the debt offering that we're looking at, multitron, multimaturity, is arguably going to be in the 13 billion camp. i've seen numbers 8 to 13 billion. let me get this straight, as we embark on a two-day fed meeting where the main medicine for everything we've seen really since the crisis is test tube liquidity, okay? put on your white jacket, central bankers, we're going to drum up some test tube liquidity, and maybe in the beginning, the notion of trickle down wasn't a bad idea. it wouldn't be my idea, but let's give fed officials the benefit of the doubt. as we roll past this, what i see is companies like apple holding their stock up by basically using cash hoards, not to enhance computers or come up with an iphone that you maybe strap behind your ear, but buying stock back.
and some of the money overseas really under scores the notion of the corporate tax policy needs revamping. but does it really? if that 35% didn't exist, 70% of the 140 billion was here, they'd probably still buy stock back, which shows that as we head into an ecb meeting on may 7, where they're talking about going into u.s.-style qe, i ask why. why? you have boone yields at 150 basis points, okay? the difference between our tens and their tens is a 9 1/2-year wide. i look at portugal and spain. spain's five year is at 1.71. it's below our five-year. so why do we need to push rates even lower when u.s. style quantitative easing? when i look at homeownership, diana olick, 19-year low in homeownership in the u.s. what happened to low interest rates there? see, it isn't about low interest rates and it's not about the m.i.t. models we'll share with
other central bankers from the u.s. vantage point. it's that the strategy of trading liquidity is really easy. we could test dub liquidity all over the landscape, but the problem is, and europe is going to figure this out, an it's why i'm not as optimistic on europe, even with moody's making a stable outlook for greece, i get it. the debt's come down, southern debt's come down, greek's debt's come down, but the real problem at the end of the day isn't about really big customers getting money, because the apples go to market, elon musk sells 23 cars, he can go to the capital markets. it's that smaller customers in the u.s. and especially in europe. they can't get credit. and until they get credit, you're not going to see a good old-fashioned economy rebound like we did in the old days. carl, back to you. >> we're still waiting for that trickle down, rick, you're right. thanks a lot. rick santelli. when we come back, comcast chairman and ceo brian roberts will join us for a live interview. we'll get his stake on the state
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cents. we'll see if that hangs on as we enter the more volatile period of the morning. if you're just joining us today, here's what you missed. >> announcer: welcome to "squawk on the street." here's what's happened so far -- >> the list verifies what i think the common person thinks in this country, which is that if you work really hard, even if you're from humble beginnings -- and that will be jack welch this morning or howard -- you can still make great. >> the market would seem to be weakening, even months ago. but our data are still holding in there on a seasonally adjusted basis, they look pretty strong. [ bell sounds ] >> you know, the winter wicked is dead, and we're excited about the year going forward. >> one of the keys has been the ability of the customer to customize, and that customization has given rise to things we never believed possible, but it's also a credit
to people who are being able to make it. good tuesday morning, it's 11:00 a.m. on the east coast, 8:00 a.m. out west. we have a great show lined up. comcast ceo brian roberts is here to talk about net neutrality later this hour. meg whitman making cnbc's list of the top-25 people in business in the last 25 years, but what was the biggest mistake she made in her career? she'll talk about that. and speaking of cnbc 25, walt mossberg will break down the most dramatic changes in the past 25 year when is it comes to personal technology. that's coming up this hour. first, we want to get to some of the top stories in the world of tech. another great guest, kevin o'leary, chairman of the o'leary funds and investor on "shark tank." kevin, great to have you back. >> great to be here. >> investors are keeping a close eye on twitter as it's set to report earnings after the bell tonight. user growth and user engagement the key things to watch as analysts expect a loss of 3 cents per share, revenue at
$241 million. twitter has struggled since going public, down at least 35% this year. i'd love to get your thoughts knowing how active you are. >> well, twitter is not an investment for me, because you know i will not buy a stock that doesn't pay a dividend. >> yes. >> as a vehicle, let me ask you a hypothetical question. if you buy sirius satellite radio, and you want howard stern's content, you pay a premium for that. why can't we see and envision an opportunity for twitter that's cureating the thoughts of a very famous person, with millions of followers, what stops them from turning that into a pay-per-view radio station, where i, perhaps interested like someone from walter moss berg, content i wouldn't get through any other vehicle, and i would pay 99 cents a month for that. why can't twitter do that?
what would stop them? >> i think the argument might be it's still early. they're still going for scale. they're still a fifth of the size of facebook, right? >> but if you own that stock today, you better hope they'll be able to do that, or you're screwed. >> the other issue, kevin, you talk about how much you use twitter and how important it is to be tweeting alongside who are watching your shows. the arguments the "wall street journal" makes is it has yet to go mainstream, 200 million users. it really hasn't -- it really hasn't gotten the wave of people from the populous that they maybe need to get the momentum. >> the first 200 million are really hard to get. >> yes. >> and so, my thesis is for this stock, although i have to, you know, continue to disclose, i don't own it, is that at the end of the day, they will hire the people that will figure this out. you're right, the engagement aspect is more -- it's diffic t difficult, i redid my whole front end, easier to work with. will it get to a billion?
i say yes, if can you start with this much momentum. now, all of the issues around profitability, should you pay pay this for the stock right now, it would be against everything in investing, until it pays a dividend, i won't own it. call me when that happens. >> you think back five years, nobody really was paying attention to twitter at all. how much would you worry about five years from now? something completely annihilating it, making it obsolete and irrelevant? >> i always worry about this stuff. because i have the advantage of a bunch of teenagers in my basement -- boys, girls, men and women now in their early 20s, and that's my litmus test. i ask them what's hot. facebook's not hot, twitter's not hot. there's a whole lot of other stuff hot. they tend to use it for a while and then did dies away. i think getting traction is difficult. that's why you have to give some credibility to twitter and facebook. there's always something else. there was another one called facefeed, my son got into. he's forgotten what that was.
>> i've never even heard of that to be honest. >> check it out, it's kind of cool. >> there are some people in the investing community who think twitter is hot. but it still only has half the user base of whatsapp which we've often debated the $19 billion price tag on that one. >> can i ask you a question? if you had $23 billion, would you buy twitter for that today? would you personally do that? >> i probably wouldn't be here. >> no, no, my point is, if you are making an investment decision, would you do that? >> it's an interesting concept. >> depends on what your investing strategy is, right, early cycle -- >> i think on aggregate, that purchase price, to buy that platform now, would be excessive. and so, to me, that stock is overvalued. that's my opinion. >> yeah. we'll keep that in mind. of course, speaking of twitter, tune in tomorrow. we'll pose all of the questions and more to ceo dick costolo, joining us live for an interview 9:00 a.m. eastern time, and tweet us with @asktwitter, for
your questions with him. we'll try to pose as many of those to him as we possibly can. next up, yahoo! officially jumping into original content, ordering two tv-length original comedies from the producers of "wedding crashers" and "the office." they're expected to launch with eight-episode seasons. you can watch the shows on yahoo!'s website or the screen app on roku or apple tv. yahoo! also announced plans to stream live concerts through a partnership with livenation. everybody knows they've been wanting to get into original content. is the space getting too crowded, though? these things are not cheap to make. >> i like to look at it this way. the benefit that yahoo! has is 800 million users and there's certain content they like to buy or watch. but to get into the creation of content in my view is a mistake. the crappiest business on earth is producing television and movies. i'm sorry, it's true. i've been there, and i've done that. it is horrific. the risks are huge.
just dealing with the artists is insanity, and the whole concept of getting hits is next to impossible. now, you know, you can start to fine tune what yahoo! has to do. why not curate content? to take the risk and say that's a winner, let's do a pilot and let's not, that's insane. the returns on that are sub-7% since the beginning of time. why bother? what's the point? i'm also against netflix doing it, because their subscription model i used to love, and now taking a chance thinking everything will be a hit. >> at least they've generated buzz doing it. they looked at video and tv, and said if you don't own the pipes or the content, you're a middle man and you will not be profitable in the long run. you disagree with that? >> it goes in and out a phase every seven years. there's a time when the pipe is hot and the content is hot. then somebody dreams up together
it's the only way to go. it cycles in and out. that's the genesis of all of the aol deals in the beginning, time warner. there's a place for each of these business models mitigated by the amount of risk you're willing to take. if you have hundreds of thousands, millions of subscribers, and you can sell them other guys' content, you will make money doing that. >> you will acknowledge when you do have a hit, it's sweep. it will drive eyeballs and subs. netflix is testament -- >> carl, if could you do three hits in a row on television or feature film business, you would be a rock star. and practically no one does. it's almost impossible. >> like baseball. even the hall of famers are batting .300. >> it doesn't happen that way. it's the nature of chaos making art. that's why i hate it. >> yahoo! is making a bet. they said they're doing it. they made the announcement last night. do you think if they're going to do it, the right thing to do is go in, two news shows, new comedy series, just put all your eggs in that basket?
>> no. no, that's not a good idea. right now, they're going to get a reboot when alibaba goes public, and this is not the way to invest the money. if are you a brand-new hedge fund and put all your dollars into micking television, i would be shorting your fund. this is my opinion. listen, it's bad idea. >> that's why we turn to you. please come back soon. >> thank you. >> kevin o'leary. good to see you. up next, meg whitman is the only woman to have headed two large public companies, and for that and more, she's on the list of the top people in business over the past 25 years. whitman is known for great success in the business world, but what is the mistake she's ever made as a ceo? she'll answer that question in a moment. plus, comcast ceo brian roberts is here to talk about net neutrality, the future of cable, and a whole lot more. that's coming up later this hour. ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪
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look at energy, one of the big winners on s&p. >> the best one so far in the s&p 500 today. energy stocks are on fire. the s&p energy index is hitting an all-time high today. among the energy stocks that are hedging their 52-week highs this morning, check out shares of exxon mobil, schlumberger, and it's overall a great day, but it's not oil exploration production, services, it's across the board. a decent day for the energy stocks. >> dom, thanks a lot.
getting word that germany siemens is in the process of submitting an offer to acquire the energy business of france's alston, according to the frinch economy minister. he said it's being considered by the board. of course, general electric has an offer on the table for the power division, although we know so much of this is happening in the halls of the highest political offices in france. david, do we -- we talked about this the other day. >> we did. that will be an important part of this. they have confirmed that. in fact, siemens putting a release out saying its supervisory board decided to make an offer. they are asking for and have received four weeks of due diligence. remember, it's a different process in europe and in the u.k. than it is in the u.s. in terms of takeovers, and in this case, you have france itself and the government highly involved in the process. but siemens will be there now, conceivably competing against ge. >> ultimately a u.s. multinational against a german multinational corporation.
do you expect one will receive more favorable reception? >> yeah, i think the question answers itself in a sense, potentially. but again, we don't know and we don't know what the numbers will be or how shareholders will b included in the decision making which seems to be beyond simply the board of that company and its shareholder base. but obviously, including france, given it is viewed as a champion, so to speak. so we'll see. >> yeah. meantime, david's back on set, obviously, with another edition to the cnbc 25. >> that's right. we want to talk to meg whitman, carl. she comes in at number 18 on our top 25 rebels, icons, and leaders. of course, i had the chance to talk to whitman virtually every quarter about the turnaround taking place at hewlett-packard, but in this case, i was also able to talk to her about the last 25 years and what she believes has been the key to her success. >> well, first of all, thank you very much for the honor. it really is fantastic. so i appreciate it very much.
you know, listen, i think there's a number of different things. first is, i think i have a lot of energy to keep tackling the tough challenges and, you know, businesses is a full-contact sport, and it's hard. and then i'd say, you know, it has always been for me about a team sport and who you have on your team. and who your team members are, even if you're not the boss. and so, it's the right person in the right job at the right time with the right attitude. and then, making sure you got, you know, the right strategy with a real eye on your customer. that's probably at the high level how i think about it. >> and in terms of the successful company, when you think about obviously ebay and your tenure there, and now two and a half plus years into hewlett-packa hewlett-packard, what do you think about when you do think about what has made certainly made ebay successful and what you've been doing at hp to make it a successful company? >> well, the challenges are almost entirely different. ebay was a start-up with an
incredible tailwind of the revolution. hp is a company trying to reassert leadership in a tough, competitive business. but the commonality is all-around focus on customers. at ebay, we used to say that we provided the trading platform, but we didn't, in fact, build the company. it was our users, buyers and sellers, who built the company. at hp, it's around the customers to make sure we're the very best technology partner in the world. the commonality is customer, customer, customer focus and make sure you're tailoring your offering and doing everything you can to help your customer succeed. >> when you think about yourself as a leader, you know, and i've watched you in that role, and i've watched especially your ability to communicate particularly for enormous organization like the one you're currently running, how important is communication? and what do you think has lent to your own skills, your own success as a leader? >> well, first, i think you're right, communication is critical, because whether you're
running a company of 30 people, which is what ebay was when i arrived or a company of 275,000 people, which is what hp today is, is everyone needs to know what the mission is, what the vision is, and where the organization needs to go. and that's all about communication. i'll have to say that i think i'm a better communicator today than i was at ebay, because i had that little run for governor in the middle. and that really did actually help my communication skills in terms of communicating with huge numbers of people. and what i learned is it's not the facts and figures, it's not the left brain, it is the stories you tell to communicate the vision that you are trying to get the organization to rally around. >> time for one of those questions that we're going to be asking a lot of our winners, so to speak, which is to look back and think about a loser, think about something that did not work out, a failure. >> yeah. >> and if you could pick one for me, if there is one. and, of course, what it may have led to in perhaps of learning experience and enabled you to do something better in the future? >> sure. well, i think, you know, the
number-two internet market in the world is japan, or was japan when i started at ebay. and you will notice that ebay never really got a position in japan. and the story behind that is that we had that very well publicized site crash in june 1999, you may have been covering it at the time. >> right. >> so we had to repair our existing site and, therefore, miss the window of opportunity in japan. and it just taught me follow your intuition, you know? i had a sense that the technology underpinning ebay was perhaps not going to help us scale where we needed to. you know, we had so many other things to do, and it was such a -- we were growing at 70% compound monthly growth rate, so that miss of ebay japan is one of the big failures of my time at ebay. and i'd say the other failure, which we talked about earlier, is the run for governor. >> right. >> put everything i had into it. you know, but it didn't work out the way i'd hoped. i learned a lot from it.
and i think it made me a stronger executive and probably actually a stronger person. >> you think you'll ever run for public office again? >> i don't think so. >> and finally, meg, we want to try to get a broader answer here again from our winners, so to speak, our 25. when you look around and you have a great vantage point, of course, having been in silicon valley for so many years, when you look at some of the people you think will be the leaders of the next 25 years, is there anybody in particular who comes to mind, or that you have an eye on, whether they be working at hp or elsewhere? >> well, i will tell you that the leadership capability of the 20-somethings and 30-somethings is unlike what i've seen in my career. people are taking on leadership positions at such young ages. you know, i was 42 when i came to ebay, and, you know, some of these young men and women are doing extraordinary things in their 20s and 30s, whether it's mark zuckerberg or jack dorsey. you know, they are taking on huge revolutions and changing
the way we live and work in ways that are really quite extraordinary. so lots and lots of leaders who are changing the landscape at a much younger age than certainly my generation did. >> right. of course, you have to end here by telling me the benefit of us being older, right? there's got to be baby fit to that. meg, thank you so much, and again congratulations on being on our 25. >> interesting, david, to hear her talk about her skills as a communicator and how that's made her a better ceo, no doubt she's one of the more vocalist ceos. as you say, we hear from her almost every quarter, but employees appreciate that, a way to imprint strategy, morale, and make sure the companies of various cross roads you are vocal. >> without a doubt. and earlier, tyler, we had the piece on jack welsh and one of his strengths being enthusiastic, being a
communicator, i think might not have come easily to meg whitman, and she pointed out the run for governor helped in that regard. you're talking about an organization that had over 300,000 employees when she took over hp. it's less than that now, as you heard 275. nonetheless, that's a key part of it. you can't run every little bit of it, but what you can do is communicate a vision, a strategy, and try to get everybody involved in that in terms of their behavior. >> which means saying the same thing often again and again and again. we talk about the role of women on the list. and tech has been through a couple of cycles. >> right. >> when she was back on in the day, it's, wow, that's meg whitman. >> yeah, hearing 70% monthly growth at ebay, you can remember those days, the torrid growth in the internet, but different assignments, if you will, for her. one taking a company that was growing so rapidly and trying to professionalize it, if you will. another, the iconic silicon valley company, the first one
started in the gram, trying to reinvague rate it. if she's successful, there's no doubt she will be looked on as one of the all-time great leaders, period, in terms of corporate america. >> with amazon, one of the forefathers of ecommerce -- >> ebay, you mean. >> yes. >> yeah, exactly. >> thank you, david, thank you for that. when we come back, we're talking live to ceo of comcast, brian robert, on net neutrality, the future of the cable industry and netflix. he'll join us when "squawk on the street" comes back. after this break, walt mossberg on 25 years of changes in technology. all of that in two minutes. ♪ ♪ ♪
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as cnbc counts down the list of top 25 important business leaders of the last 25 years, a good chunk of the winners have come from the tech industry. we thought it would be a good idea to look at the greatest innovations within that sector during that time. who better to ask than walt moss berg, the executive editor of recode. we could talk about phones, computers, cameras, cell phones. what do you think is the biggest change in the device space that we've seen over that time? >> well, i think definitely the biggest change in the device space has been the smartphone. you know, when you went on the air in 1989, phones were still,
as i said in the essay i wrote for your website, phones are still sort of -- cell phones were sort of a science fair experiment. they were meant mostly for the use in the car. they were incredibly limited. and even as recently as the ' s '90s, the late '90s, they were kind of iffy. you didn't really have a real smartphone. you know, it's hard to believe, but the blackberry didn't come along until ten years after cnbc started, and when it did, it was really more of a glorified pager. so the smartphone that we carry in our purses and pockets today is just vastly more powerful than the entire computer you could buy in 1989, and that's quite a change. >> walt, one of the toughest questions on this list, anyway, is whether you put gates in at number two, jobs number one.
or do you flip it? give us the definitive answer on what was the right thing to do? >> you know, i have huge -- i have huge respect for bill ga s gates. i've spent many hours in conversation with him. i had huge respect for steve jobs, and spent many hours in conversation with him. they both -- they belong in those spots. but it's a tough call. i think you did the right thing. i would have -- i would have put jobs number one. not to take anything away from bill gates, either from his contribution in spreading the software, the personal computer software, allowed personal compute rs to be standardized ad lowered in price, and all the things he did in his tech career. but steve jobs was more the risk taker, more the guy willing to take the big leaps, the big bet-the-company leaps, and he
had a string of fundamentally game-changing things that disrupted not only the tech industry, but, you know, media industries, you know, just all kinds of industries. by the way, during the heart of his career at apple when he was rolling out these big game changers, the ipod, the imac, the ipad, he was running a movie studio, pixar, which is now owned by disney. he was just an amazing -- an amazing guy, and i think you put him in the right place. >> walt, you mentioned that blackberry was actually first to the smartphone market. you could argue that sony was first to the ipod market with the diskman and walkman, and amazon had the kindle before the ipad. what lessons do you think other people in the sector can learn from this idea that you don't have to be first, you just have to be the best?
>> well, that is -- i think you stated it real lie well. -- really well. jobs' attitude was to look around the landscape. he had an uncanny ability, which gates acknowledged, by the way, when we had the two of them interviewed together at our conference, he had an uncanny ability to figure out what people wanted next, when they were ready for it. a lot of these other products were a little early or limited or didn't quite close the circle. the blackberry was an email terminal. it didn't quite close the cir e circle -- yes, there were some apps for it and so forth. but it didn't really do the full job. the same thing -- the kindle was an e-reader, not a full-blown tablet that did everything else. and steve jobs had the uncanny ability to look at the landscape, see what kind of a partial products were that were out there, and then pull the software and hardware together
in a really beautiful way. and i'm not -- i'm not -- i don't know when we'll see the next -- the next person with that ability. >> it's a great lesson to remember, walt, and a great column you have. cnbc.com/25, for anyone interested. a lot of great and then images. thank you for joining us. >> thank you for making me a part of it, and concongratulati. simon is here with the close of europe. >> check out the figures on the screen. we're at the height of the earnings season in europe. some strong gains today. turns out that the u.k., britain, is the fastest-growing economy within the g7, growth at an annualized rate of 3.2% coming through today. in the meantime, the other thing of note is it's widely reported that mario draghi, the head of the european central bankers, told german lawmakers that they're not close to embarking on qe. no, it's not going to happen. he says near term, tomorrow, we get some important inflation data. the breaking news now at the
corporate level is you've just had a statement released in munich from siemens over the battle for alston. the supervisory board of the german giant was meeting today whether to bid against the prospective offer from general electric here in the united states. the statement we have from siemens says we are prepared to bid further down the line, but we want access to your data room and we want to interview management over the course of the next four weeks. so the whole process, if you're waiting for german bid, it will slow down. siemens over the past week has lost about 5% of its value. in paris, the french economy minister, who's basically as socialist as they come, has been defending the government and saying they will do everything that is necessary in order to protect french interests. that probably means insuring that 18,000 jobs are secured. the question is, which of the two offers ultimately from siemens or from general electric will do that? here in the united states, in
fact, on this network, the former ceo of general electric, jack welcwelch, says ge's recor stands on its own. it was the biggest market for many years. and as far as he's concerned, ge could win this. take a listen. >> we've built over -- of the last 30 years a french relationship that's very deep. and france and ge have had great partnerships, so i'm optimistic that the chips built over 30 years with france will, in fact, go well for this. >> in the meantime, let me for the sake of completeness show some of the companies reporting today. nothing is falling out of bed. abb, the power line distributor, it was slightly up higher. slightly disappointing. bathrooms chips, oils, telecom, doing well. and the banks are higher. number of banks reporting in
europe. noticeably deutsche bank. no real problem there with the talk of the capital increase. the other thing that happened is the authorities published the detail, guys, of the stress test that the major banks in europe are going to have to go through. i will save that glorious detail for another day. back to you. >> sounds good, simon. thank you. after this break, comcast ceo brian roberts of our parent company. don't go anywhere. we're back in a moment. just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement. and save on taxes where you can. so you can invest in the life that you want today. tap into the full power of your fidelity greenline. call or come in today for a free one-on-one review.
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dow up some 89 points thanks to strong action out of merck. a series of winners and losers as we take stock of earnings season again. coach is one of the biggest losers on the s&p, after beating by 7 cents. david? >> thank you so much, carl. comcast yesterday striking a very large deal with charter communications that will see comcast invest some 3.9 million subscribers once it completes its acquisition. of course, it is contingent on that successful merger taking place, or i should say it taking place. joining us now from the cable show in los angeles is comcast chairman and ceo brian roberts. nice to have you with us, brian. good to see you. >> nice to be with you. good morning. >> we'll have to start there on the deal itself, given the news yesterday. does it make regulatory approval more likely, and also, does it perhaps move up the time line for said approval?
>> well, i don't know about that. but i think it hopefully makes good on the commitment that we made on day one, which is that we would be below 30% of the market for video homes and now identifying which markets we would part with, and we also are doing a transaction with charter that allows for both companies to have regional operational efficiencies by trading markets, so that as we enter new communication services and broaden our capabilities, the businesses make more sense. each one is a stand-alone basis. so i think it's a good transaction for both companies and for time warner. i think it is a few more customers, 3.9 million, than the 3 million we originally said, because that's how these -- how it worked out. and i think it gives more certainty to the viability of those other companies, the
investment that charter's going to make, their long tradition of being in cable. and so, i think as the ceo of time warner, it's a win-win-win for all three companies here. and i hope it will be help the process along. >> yeah, on that process itself, of course, i know last week you took note of comments as we did from the ceo of netflix, reed hastings, when he said, and he said, hey, if there's anyone i wanted to trust with controlling half of the internet, you might pick brian roberts, because you're thoughtful and a number of other very nice things, he said. he went on to say, i don't want anyone to control half the internet, and that's the real basis of why netflix is objecting to the merger. can you respond to that? >> well, i'll let our filings speak for themselves. i will point out that one-third of all the bits of the entire internet in the united states in prime time or netflix, and we've had a nice relationship, we hope, and even when people may
disagree and we certainly disagree with that, we think he's done a great job building his company, and at the same time we want to make sure that all the statements that are made are truthful and are accurate about various statements that have been made. and i'll let our filings and our comments speak for themselves. we think what we're doing is going to allow for more innovation, more scale, and really when you put all that transaction together, we're getting 7 million more cable customers net of the charter disposition. so to go into new york and l.a. and dallas and really maybe just a couple of other markets, that's what this is all about for comcast. it allows us to create a company that can continue to roll out the kind of products that are over my shoulder. we're here in los angeles at the cable convention, the annual show. and i think innovation, staying relevant, finding a way to invest more in the networks,
speed up our customers, and at the same time not change anything. we're not in new york. we're not in l.a. with our products. >> right. >> and so, i don't quite see why he would object. but he's entitled to his opinion. >> well, he certainly is, and he may be able to get leverage out of it. something that hasn't garnered as much attention as perhaps it should, and i want to get your insight, brian, last week the fcc and potentially what my no longer be net neutrality, new rule when is it could come to that, it would seem quite beneficial for a company that will be bringing broadband to more people in the country than any other company. are you heartened by it, and are you surprised by it? >> the reality is i haven't seen anything. so there's been a rush to judgment in the media that i think is premature. and there were rules, the open internet order that had previously existed for several years. comcast has agreed to live with that order regardless of the new
order, or regardless of the courts when we bought nbc-universal, and through 2018. and time warner cable will come under that open internet order, again regardless of any new activity. so i want to wait and see what the rules are. i think having clear rules, so long as they're in the spirit of the last set of rules, makes a lot of sense in that it allows you to invest, allows your investors to know that there's a -- what the rules are. and i think it allows consumers to know they're always going to go wherever they want, they'll be able to do so in an open way, never have any blocking, and that's never happened. frankly, i think it's a bit premature to know until we see the specifics. >> brian, whether it's netflix or amazon, today it's yahoo! everybody is trying to get into the original content pool. and i just wonder, can you help us understand how much we can absorb and whether or not when we reach some sort of bubble in
terms of original content, or at least companies trying to enter original content? >> well, it's a great question. it's a golden age of original content. being here in los angeles and hollywood, there's never been more excitement, more platforms, more choices, more direct ways for authors and creators of that content to get it to the consumer. and it goes to kind of the broader point, which is this world is changing so fast. that's why we're trying to do our transactions. it's why, i think, companies like yahoo! and others are changing what they've historically done, and nobody's crystal ball is perfect. i think our company is very fortunate. we had a great quarter. nbc-universal, it looks like nbc will finish the year as the number-one broadcast network. but you can't rest on your laurels. you have to keep investing, innovating, and try to reimagine who and what you do and how you relate to your customers. and that's why i think in the
regulatory arena, people should have a careful and thoughtful touch, because this world is changing so fast, and what the next generation wants is not what our generation perhaps, the way we grew up. and that's what make it is so interesting being in this business, and our company is touching a lot of those spaces, but we don't have any more perfect information than anybody else. >> on that note, of things changing fast, last week arguments held in front of the supreme court about the legality of aereo. i'd be curious, brian, in some way, if, in fact, the court upholds the legality of aereo in a ruling that will come in a number of months, it would be bad for nbc, but possibly good for other parts of your busin s business, namely retrans. but maybe bad on the core-cutting side. what are your expectations when it comes to the aereo ruling, and what will it mean for comcast? >> well, i think in the end, we're all going to have to wait and see on this one. it has clearly gotten a lot of attention.
our legal view -- excuse me, my earpiece -- our legal view is that it is not legal and that we believe the majority scenario is the court will find it isn't all within the copyright laws and the intention of creating retransmission consent for the local broadcasters, but we'll have to wait and see. one of the ways we're trying to build our company, one of the things we feel is unique about comcast, nbc-universal, is that we're a company that is in a lot of spaces, and sometimes we're on different sides of those kind of matters. in this particular case, we felt it was clear as a legal matter to come down and support that we don't believe it is a legal scheme. >> right. >> but it is a fast-changing world. and i think we're well positioned in any event. >> finally, back to the finances, as i hear the music kicking up there. so hopefully you'll hear me, brian. >> yeah. >> the charter deal leveraged neutral, i think, is what the
company said yesterday. but your shareholders are always clamoring for you to buy back more stock. it was 10 billion done, i know, in conjunction with the completion of the deal. but is there a possibility with the proceeds from charter that you will add to the buyback at comcast? >> i think we tried to indicate that on our earnings call, and again yesterday. that while the exact cash flows and leverage ratios aren't completely clear, because you have to wait until we get to closing, and when that occurs, that our goal here was to buy time warner, now be able to, in effect, give to our shareholders significant value directly between what will be charter stock and spinco security, as well as reduce our own debt and end up with some cash balances, and all of that we then hope to keep about the same leverage where we started this year before any of this happened, which is around 2.2 times debt-to-cash flow. if the run the math on all that, we probably will need to be in a position to increase the
buybacks, but let's wait until all the numbers come in. but at least that's the plan of action, and i think it's, you know, really good for our share hole e holders, because it will give them immediate liquidity or dividend at the same time immediate reduction in debt, and we pick up, as i said, about 7 million video customers and give ourselves a wonderful footprint, and with the 1.5 million exchange in customers with charter, making our existing properties, so time warner had dallas, i believe, and charter had ft. worth. we will get both markets. los angeles, similar story. and other -- and charter will have great properties, as well. so a lot of work by a lot of people. but i think it ties well together and the balance sheet is the next area we'll keep talking about as the quarters go on. >> all right, brian, of course, a lot for us to wait on and look forward to.
thanks for joining us. brian roberts, chairman and ceo of comcast, which, of court, is cnbc's parent company. >> thank you. all morning long, we've been highlighting the top people in business over the past 25 years, and that list is not complete without the most important people in media, rupert murdoch. we'll go behind his story and his legacy in just a minute. ♪ [ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up.
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all right, coming up at the top of the hour, we'll look at how larry ellison landed himself on the top 25 list of rebels, icons, and leaders. plus we'll talk to another member of the top 25, carl icahn. and wait until you hear who he says is even tougher thank him on wall street right now. one of the most powerful women in finance joins us with her outlook, sunni harper from citi, on why she's worried about friday's jobs report. and ebay releasing earnings after the bell, but traders are battling it out before the results. straight ahead on "the half." kayla, we'll see you in ten minutes. >> thank you so much, scott. cnbc created a list of the 25 most influential and transformative people in business in the last quarter century. earlier today, we revealed the list and how they ranked, but
all day we're telling their stories, reported by tyler mathisen, back at headquarters in engelwood cliffs. tyler, take it away. >> it's been a busy morning. we've counted down the top 25 list of the transformative business people. here are the top sort of 15 from number 11, and that's where we are right now. number 11, we compete with them, love him or not, rupert murdoch, the transcendent media tycoon of the 20th century, brash, bold, and almost as attention grabbing as his headlines. ♪ >> there is no question that rupert murdoch is a newspaper man. he is really the last of the old media lions. >> a lion with a roar heard 'round the world.
polarizing, indomnitable, rupert murdoch is all that and more. in media, over the past 25 years, no one comes close to the global sweep and audacity of the man from melbourne. david fullkenflick is a media correspondent. >> he found his role model, hero in many ways, his father had died. >> young murdock inherited a newspaper business. >> it's a very different life he has to lead, and he has to figure out more about the business side in the way in which his father wasn't entirely convinced he could do. >> carefully, shrewdly, one acquisition at a time, over a period of decades, murdoch pieces together the publishing and digital assets to form a media empire. its two parts are known today as news corp. and 21st century fox, with a combined market value of $86 billion.
>> stubborn, controversial, unafraid. i mean, unafraid of virtually everything. he is a one of a kind. >> the "economist" magazine said he invented the modern tabloid, but he can go upscale, too. he bought "london times" and "sunday times" and in 2007, the "wall street journal." >> he bought it for $5.5, $5.6 billion. within a year, he had to write off the value of the acquisition by half. investors rolled their eyes, threw their hands in the air, why are we doing this? you're not doing it with the personal money, you're using shareholder money. >> to be sure, murdoch's companies are publicly traded, but they are murdoch's companies, family dominated. sons james and lockland have run key businesses and lockland is poised to take over when and if the old old man steps aside. he has been a disrupter in movies and tv, too. >> it took a guy like murdoch to say, oh, okay, three networks around for 40 years, i'll make
it a fourth. >> and he did, building some of the most enduring franchises in tv history. there would be nfl deals, the world series, global satellite and sports channels, and then, in 1996, the fox newschannel, led by master showman and former political operative roger ales. >> the way fox was able, from a standing start, pass cnn, and really double the combined ratings of all its competition, was just by offering up a viable alternative. >> it wasn't just how they told the story, but the stories that they picked. he made general media realize they had a very controlled and contained prism that probably did not reflect the entire american population. >> the newschannel was like murdoch, the man, aggressive, unapologetic, sharp with the elbows and the opinions. it was a huge, transformative hit. but that same aggressive edge can cut both ways. in 2011, murdoch faced allegations that reporters and
editors at a london tabloid had hacked the voicemail of celebrities, royalties, and common citizens. >> i would like all the victims of phone hacking to know how completely and deeply sorry i m am. >> rupert murdoch's imprint is on all of his tabloids and the hacking scandal is the result of what appeared to be hundreds, if not thousands, of individual criminal acts committed by a cadre of people. but they are the fruit of a free that was planted by rupert murdoch himself. >> this is the most humble day of my career. >> still, the old media lion retains his roar and his bite. >> he is the true successor of william randolph hearse or cain, citizen cain. >> his influence in media cannot be understated and the empire he has built cannot be understated. >> to compete with him is to learn firsthand how formidable he is. rupert murdoch, one of cnbc's first 25 rebels, icons, and
leaders. the number 10's story coming up on the "halftime report." you can view the full list and their stories online at cnbc.com. and also tonight at 7:00 p.m., a special reveal of the top five and a couple of extra bonus picks, folks. carl, i thought you nailed mr. murdoch there when you said he is fearless, and he is. >> tyler mathisen working a long day today, tyler, thanks. we'll see you soon. stubble and 5:00 shadows giving razor blade companies something of a rusted edge. americans are simply spending less on shaving products. proctor & gamble's gillette business wants to buck this beard trend with a brand-new razor. sarah eisen is live with the president of gillette in an exclusive interview. hey, sarah. >> hey, carl. i've got the new razor. it's the flex ball. it has this little ball, brand-new innovation, with patrick levay, and global grooming for proctor & gamble. what's revolutions about it?
>> we're excited about the launch with the flex ball. here's the starting point. when you look at a guy's face, it wasn't built for shaving, right? it's full of curves and contours and the challenge of today's razors, they don't follow the contour, jump off, and the result is missed hair, and that's a real frustration -- >> this is 20% more -- >> with this, the way the flex ball works, a 3d pivot, and maximum contact around the contours, so you get virtually every single hair. the guys absolutely love the transformational experience. >> so efficiency is one thing. you can't ignore the fact that razor sales have been disappointing. if you look at the scanner data, 16 of the last 17 monthly periods saw declines for razor sales. why aren't guys shaving anymore? >> different things going on. what we're focused on is as the leaders of the category, to drive the gloeth of the category. the category is growing globally. this type of innovation, we know, appeals to many guys that will bring more guys into our franchise, more guys into the
category. we also know that from guys who have decided to go to facial hair, and they discover this product, a number of them come back clean shaven. >> they abandon the beards? >> exactly. >> because they like the razors? >> exactly. >> are you worried it could be a secular change in the way that men groom themselves? >> no, if you look at the history, these trends have come and gone. right? so today, about 40% of guys have facial hair. and we see it as an opportunity. we actually launched recently a product called style wear, 3 in 1 tool, great way to manage your hair. we think it ebbs and flows. like body shaving. we were talking about that earlier. it's a big trend right now. >> it's a big trend? >> big trend. 44% of guys, 18 to 44 -- >> shave their whole body? >> we launched gillette body, something designed for the male
terrain. >> we have the start-ups. how much competition do you feel from those guys? >> we respect all of our competition, whether they're old or new. frankly, our focus is really making sure we provide the best shaving experience to guys out there in a way they say this is fantastic value, right? that's how this company has been built. that's what this whole launch is about is elevating the standards of shaving and continuously delighting guys that are interested in this experience. >> and i know this was five years in the making, this technology. it is critical for proctor & gamble. you said 9% of total sales come from grooming? >> correct. >> how do you turn that around? it has been flat to disappointing lately. is this going to do it? >> this is an important building block of our program, absolutely. we know from the experience that we have in terms of feedback from guys that this changes their perception of shaving. we know this brings more guys into the franchise. it brings more guys into the category. and what's -- >> and women? i've used men's razors. i feel that they're better than women's. >> so actually -- that's a great question on women.
i'm going to reserve any comment at this stage, but i'd be happy to talk about it in the future. >> i'll use it and give you my expert opinion. thank you very much for shutting down with us, at the launch of the new razor, hoping to turn the category around. did not know, carl, that men's body shaving was hot right now. >> neither did we. we're still shaking our heads over here. i love how guys you sell them the razor and later sell them the razor blades. >> a cool business model. fascinating. >> we're watching sprint today. nice increase in quarterly and operating profit. >> you know, carl, the stock has moved up since the first hour when i mentioned in regard to sprint. it's not if, but when. softbank and sprint will make a -- try again -- or try to announce a deal with t-mobile, and that's moved the stock. want to come back to it. it's not an idle remark on my part. i've been reporting on this many months. important for investors to keep an eye on the incentive auction rules. there have been leaks. they do seem favorable to keeping the companies separated
by giving them some edge of the incentive auctions that will come up next year. nonetheless, based on everything i'm hearing, i would not be surprised regardless of what the rules look like to give them a shot to -- >> how much investors have been waiting to pounce on any glimpse of a potential deal. >> exactly. >> all right. with that, the dow's up 88. we'll toss it over to scott wapner at hq. hey, scott. >> thank you so much. we're all over the market moves. welcome to the "halftime report." the playbook, sell in may, for the past four months, it's been the month that shook up stocks. what will happen this way? keith banks of u.s. trust gives us his view. ebay brawl. one stock, two traders, and a fight over the internet stock. you'll decide who wins. cnbc 25, from jobs, icahn, ellison, and the rest. we're ranking the most influential in the past quarter century. let's meet the starting lineup, pete, murph, joe, josh are with us today. we begin with stocks and the big question facing investors everywhere -- is this going to be another